GBP/USD Daily Forecast – Resistance At 1.3865 In Sight

British Pound Gains Ground Against U.S. Dollar

GBP/USD is moving towards the resistance level at 1.3865 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is stuck near the 20 EMA at 92.60. If the U.S. Dollar Index manages to settle below the 20 EMA, it will move towards the 50 EMA at 92.45 which will be bullish for GBP/USD.

UK has recently released Claimant Count Change report for August which indicated that the number of people claiming unemployment benefits decreased by 58,600 compared to analyst consensus which called for a decline of 26,000. Unemployment Rate declined from 4.7% in June to 4.6% in July, in line with analyst consensus.

These reports provided some support to the British pound, but many traders would prefer to wait for the main event of the day. Today, foreign exchange market traders will take a look at Inflation Rate and Core Inflation Rate reports which will indicate whether inflation remains under control. These reports may have a major impact on currency dynamics so traders should be prepared for fast moves.

Technical Analysis

GBP/USD settled above the resistance at 1.3835 and is trying to get to the test of the next resistance level at 1.3865. If GBP/USD manages to settle above 1.3865, it will head towards the next resistance which is located at 1.3880.

A move above the resistance at 1.3880 will open the way to the test of the resistance at 1.3900. In case GBP/USD moves above this level, it will head towards the next resistance level at 1.3930.

On the support side, the previous resistance level at 1.3835 will serve as the first support level for GBP/USD. If GBP/USD manages to settle below this support level, it will get to the test of the next support which is located at the 50 EMA near 1.3820. A successful test of the support at the 50 EMA near 1.3820 will push GBP/USD towards the next support level at the 20 EMA at 1.3810.

For a look at all of today’s economic events, check out our economic calendar.